Treatment of US mutual funds under UK tax law??

We are moving to the UK in the next few months and have to decide whether to sell our US mutual funds (to trigger the capital gains and pay US tax on them before we move) or hold them and sell them later, once back in the UK. Does anyone know how the UK views US mutual funds' capital gains from a tax basis? What percentage would they be taxed? (or is that considered something other than capital gains in the UK?) And does the UK allow harvesting of previous capital losses (from previous years in the US) to be applied to future capital gains once we are living in and subject to UK tax law?

Any/all details/thoughts/advice most welcome. We have to decide what to do within the next few months.

if you sell your funds in the us and keep the money in the us, uk doesn't tax it.

Dont think uk will let you apply us capital losses to future uk gains.

The previous reply is confused.

Each year you will decide whether or not to elect the remittance basis on your UK tax returns or to file on the arising basis.

You will presumably choose whichever gives you the lowest tax globally.  For most US persons (but not all) the arising basis is the lowest after claiming treaty resourcing on the US return.

If you elect the remittance basis you would only pay UK tax on US source income oir gains if remitted to the UK.  If on the arising basis, you would pay UK income at rates of up to 50% on most dividends, capital gains distributions and capital gains.  Losses cannot be set against gains for non-reporting funds.

The previous reply is confused.

blah-blah-blah

Let's pick words more carefully, ok? You said the exact same thing but added few legalese/accountant terms. So instead of 'confused' next time maybe say 'while previous speaker was correct, there is a way to say same thing using many complicated words such as 'arising basis' and 'remittance basis'.
Of course we all appreciate you giving a detailed response - maybe just tone down the all-knowing attitude.

The "back in the UK" comment suggests that the OP is a UK native and won't be a non-dom. The UK has its own version of PFIC which makes owning a mutual fund in the another country a bad idea -i.e. taxation as ordinary income plus form filling. A US/UK person can't sensibly own mutual funds (outside of a pension).

Now we're getting into a bit of meta-analysis.

From what I read OP said "We are moving to the UK" and he's posting it in a US expat forum...so I'm more inclined to think he is a US person moving here, so more likely a non-dom. But that's of course a guess, he might clear it up.

Now we're getting into a bit of meta-analysis.

From what I read OP said "We are moving to the UK" and he's posting it in a US expat forum...so I'm more inclined to think he is a US person moving here, so more likely a non-dom. But that's of course a guess, he might clear it up.

Yes residency and domicile is critical in this. If the OP will be resident and domiciled in the UK on their return HMRC will tax their global income and owning the US funds becomes complicated and any capital gains will be taxed as income. Of course that might not be too bad if you're in a low income tax bracket, the 50% taxation rate only comes into play for top rate tax payers.

If the OP is subject to UK taxation on their worldwide income I'd sell the US mutual funds and take the capital gain before leaving the US. What to do after that really depends on the OPs plans. If they intend to stay in the UK it will be better to eliminate currency risks and get the money into GBP denominated investments. The OP should determine if they will be subject to IRS PFIC rules before buying any UK based funds.

As you can see we need more information to address the issues